Licensing reform on the margin in NC and TX
Texas trumps North Carolina on two recent bills
Above image created with ChatGPT.
As we move into summer, licensing reform is usually on the backburner. Legislative efforts are still active, however, in two states.
As a reminder, unlike driver licenses, occupational licenses often do not easily transfer across state lines. This creates significant challenges—particularly for licensed workers that are following their spouses to new states. To date, 28 states have taken action to address the problem.
In North Carolina and Texas, two bills that are either enacted or close to the finish line are both far from perfect. I’m much more hopeful on the impact of a new law in Texas than I am about efforts for reform in North Carolina. I’ll break down both bills below.
North Carolina HB 763
HB763 has some elements of a good universal recognition bill. It has some language focusing on practice level, rather than on licensing requirements. There are several things, however, that might limit its effectiveness that include:
Residency requirement: The bill would be more effective if it eliminated this requirement. Why move to a new state if you need to establish residency before you can legally work? It also limits the ability of skilled workers at the border crossing state lines to legally work.
Too much board power: The bill states that applicants must demonstrate “competency in the profession through methods determined by the board.” This is far too open-ended and I worry that it will result in boards blocking new applicants from entering the state.
Excluded occupations: The bill excludes all healthcare occupations, architects, CPAs, engineers, veterinarians, pest control workers, investment advisors, and athletic agents. This is disappointing— especially since licensing requirements for many of these professions are mostly uniform. Further, there is a great need in North Carolina for many of these skilled professionals. Why keep them on the sideline?
Limited to residents of five states: Oddly, the bill only applies to previous residents of five states: Georgia, South Carolina, Tennessee, West Virginia, and Virginia. Why are residents of other states left out?
In short, HB 763 may help address some of the frictions licensed workers encounter when they move to North Carolina. But the bill has very limited applicability, and I am very concerned about the broad powers that licensing boards retain to evaluate competency. North Carolina residents would have been better served modeling their legislation from its nearby neighbor— my home state of West Virginia. At the time of this writing, HB 763 has passed both chambers and seems very likely to become law.
Texas HB5629
In contrast, to NC’s bill, there is not much to dislike about this bill. It has broad coverage of licensed occupations. There is no residency requirements. And licensing boards have no discretion to deny licenses. The big limitation with this bill is that it applies solely to active duty military, military spouses, and veterans.
But if history tells us anything, the bill could signal broader reform for Texas in the near future. Reform in Georgia and Kansas followed this path— first applying solely to active duty military and spouses, but then broadening out for all licensed workers. This bill was signed into law by Governor Abbott and will take effect on September 1st. I wrote more about this bill in a recent op-ed.
Both Texas and North Carolina have a long way to go on licensing reform. Both states score poorly in the the State Occupational Licensing Index that I coauthor. Neither of these bills are impactful enough to make any difference in how each state scores on the index. But in digging into each, I’m a bit more hopeful that the new Texas law bodes well for future reform in the Lonestar state. I’m less optimistic about North Carolina, but hopefully my inclinations are wrong and we see more serious reform move forward for Tarheels as well.